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Chairperson Sean Byrne and Managing Director Rory Brennan of Kilbay Ltd met to plan for a Board of Directors meeting - Leaving Cert Business - Question 5 - 2009
Question 5
Chairperson Sean Byrne and Managing Director Rory Brennan of Kilbay Ltd met to plan for a Board of Directors meeting. They discussed the downturn in the economy, the... show full transcript
Worked Solution & Example Answer:Chairperson Sean Byrne and Managing Director Rory Brennan of Kilbay Ltd met to plan for a Board of Directors meeting - Leaving Cert Business - Question 5 - 2009
Step 1
Kilbay Ltd has limited liability. Explain the term 'limited liability'.
Answer
Limited liability means that if Kilbay Ltd were to face financial troubles or go bankrupt, the investors or shareholders would only lose the amount they have personally invested in the company. They are not personally responsible for the company's debts, meaning their private property cannot be used to settle those debts. This provides a protective barrier for shareholders that encourages investment while reducing financial risk.
Step 2
Using today's date, draft the Notice and the Agenda for the Board of Directors meeting. (The Agenda must contain at least five items)
Answer
Kilbay Ltd Notice to each Board Member
A meeting of the Board of Directors of Kilbay Ltd will take place in the Boardroom on the 9th of June 2009 at 7:30 p.m.
Agenda:
- Minutes of the last Board Meeting.
- Matters arising from the minutes.
- Effects of economic downturn on Kilbay Ltd.
- Possible introduction of a three-day week.
- Future sources of finance for the company.
- A.O.B.
Signed: Rory Brennan Managing Director
Sean Byrne Secretary
Step 3
Explain the term 'minutes' of a meeting.
Answer
Minutes are the official written record of what transpired during a meeting. They typically include the names of those present and absent, decisions made, action items assigned, and topics discussed. Minutes serve as an important reference for future meetings and help ensure accountability and follow-up on decisions.
Step 4
Outline two advantages of meetings as a method of communication.
Answer
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Facilitates Idea Exchange: Meetings allow participants to share ideas and information quickly, which can lead to more productive discussions and effective decision-making.
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Encourages Teamwork: Having face-to-face discussions fosters stronger team relationships and collaboration, helping to ensure everyone is aligned with the goals and decisions of the organization.
Step 5
Name two long term sources of finance and explain one of them.
Answer
Two long term sources of finance are:
- Debentures
- Equity shares
Debentures: These are long-term debt instruments issued by a company to borrow money from the public. They typically have a fixed interest rate and a specified maturity date. Debenture holders are considered creditors and are repaid their principal plus interest before any dividends are paid to shareholders. This makes debentures a less risky option for investors compared to equity shares.